Some Random Thoughts on the ROI of Training

It’s been an interesting period for demonstrating returns on training programs. The Phillipses sent out a call for cases for the latest volume on demonstrating the Return-on-Investment in training.

Not long before that, CLO Magazine published a press release Organizations Fail to Tie Learning to Business Impact from consulting firm ESI International about its “global survey,” which reveals that “more than half of organizations (50.7 percent) do not measure the business impact of their learning programs.” (Visit http://clomedia.com/articles/view/3965 to see the entire press release.)The reasons aren’t surprising:

a lack of resources and people qualified to track impact, as well as the need for a better understanding of measurement methodologies. Also, up to half of survey respondents in charge of learning program initiatives still do not believe measurement is a priority or a requirement.

ESI clearly does. And as a third-party provider, they do need to demonstrate that their training programs and services provide value to clients.

But the findings of ESI don’t really differ from anyone else’s results. In fact,
despite sustained interest in demonstrating a financial benefit to training, researchers repeatedly find that organizations rarely track the impact or return of training. In their 2003 article, Effectiveness of Training in Organizations: A Meta-Analysis of Design and Evaluation Features, researchers Winfred Arthur, Jr. (Texas A&M University), Winston Bennett, Jr, (Air Force Research Laboratory), Pamela S. Edens and Suzanne T. Bell (Texas A&M University) found that fewer than 10 percent of all training programs were evaluated for transfer of behavior or impact.

More recently, in their 2007 meta-analysis of 67 studies, A review and critique of research on training and organizational-level outcomes in Human Resource Management Review (volume 17, pages 251-273), researchers Phyllis Tharenou (University of South Australia), Alan Saks (University of Toronto), and Celia Moore (London Business School) found that “training is positively related to human resource outcomes and organizational performance but is only very weakly related to financial outcomes.”

The work of researchers Lynnette Gillis and Allan Bailey, in their study of 12 cases for Human Resources and Skills Development Canada, sheds light on why, even organizations that thought their training had a positive return-on-investment, often could not demonstrate it. In some cases, the programs had no clear business objectives. In other cases, the programs went off-track somewhere between request and implementation.

Although I recognize that demonstrating ROI is a cultural practice in business and that, for some projects, doing so makes a good idea, based on my reading and my own research, I’m reaching the conclusion that, for everyday purposes, we probably need a much different way to demonstrate the value of training programs. The measures definitely need to be practical and easily obtained, as well as credible. Most efforts to demonstrate ROI fall short on at least 1 of these criteria.

But perhaps the focus of assessment needs to shift from assessing the course to assessing the function of training. That won’t necessarily be easier; for example, many organizations include training expenses into a number of budget categories other than training, including conferences, professional development, even marketing and general operations. As a result, simply finding all of the funds invested in training is an exercise in forensic accounting.

But maybe individual training programs, in isolation, do not have a complete impact on workers. Maybe it’s the combined effect of all of the training that does. Furthermore, the mere process of inventorying out all of the training that an organization has invested in might, on its own, provide many sponsors with compelling data that their investment has indeed paid off.

Advertisements

About idmodelsandprocesses

Exploring, reporting, teaching, and advising on learning and communication for the workplace and consumers. saulcarliner.wordpress.com
This entry was posted in Business Tips and tagged . Bookmark the permalink.

Please add to the conversation.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s